Fitch v. Sam Tanksley Trucking Co.

• Decision Date: 16 October 1980
• Docket Number: No. 4515,4515
• Citation: 1980 NMCA 150,623 P.2d 991,95 N.M. 477
• Parties: Max A. FITCH, Plaintiff-Appellee, v. SAM TANKSLEY TRUCKING COMPANY, INC., Defendant-Appellant.
• Court: Court of Appeals of New Mexico

Page 991

623 P.2d 991

95 N.M. 477

Max A. FITCH, Plaintiff-Appellee, v. SAM TANKSLEY TRUCKING COMPANY, INC., Defendant-Appellant.

No. 4515.

Court of Appeals of New Mexico.

Oct. 16, 1980.

Kathleen Davison Lebeck, Civerolo, Hansen & Wolf, P.A., Albuquerque, for defendant-appellant

Terry M. Word and Richard E. Ransom, P.A., Smith, Ransom & Gilstrap, Albuquerque, for plaintiff-appellee.

OPINION

WALTERS, Judge.

Although defendant has not followed precisely the format of Rule 9(m)(2) R.Civ.App.P., N.M.S.A. 1978, the Brief-in-chief clearly defines the matters appealed. Therefore, we review on the merits the workman's compensation award granting plaintiff escalated permanent partial disability benefits and $13,000 in attorney's fees, and reverse.

Prior to the date scheduled for oral argument, both parties requested summary reversal on the issue of escalated compensation benefits awarded by the trial court. We grant that request, agreeing with the parties that the issue of escalating benefits was resolved adversely to the position taken by claimant at trial below, in Casias v. Zia Co., 94 N.M. 723, 616 P.2d 436 (Ct.App.1980).

The remaining issue contested by defendant is the amount of the attorney's fee. That question was most recently addressed in Johnson v. Fryar, (Ct.App.) No. 4477, decided October 2, 1980 (Fryar #2 ). All that was said in that case applies equally here.

The parties submitted to us a Supplemental Transcript of Proceedings which shows that a separate hearing was held two months after trial when the judgment was presented for the court's signature. At the hearing, reference was made to the Supreme Court decision in the first Fryar appeal (93 N.M. 485, 601 P.2d 718 (1979), Fryar #1 ), and plaintiff's counsel noted for the record that there had been "a hearing on attorney's fees at the end of the trial and I did reflect that in the findings of fact." We interpret the comment to mean that counsel and the trial court recognized the Supreme Court's insistence upon entry of findings and conclusions relevant to the factors which must be considered by the court in determining the amount of attorney's fees in workman's compensation cases. Fryar #1, supra, 93 N.M. at 488, 601 P.2d 718.

As in Fryar #2, supra, the trial court's final findings and conclusions were virtually a verbatim adoption of plaintiff's requested findings and conclusions. There is an indication, however, that some independent judgment was exercised, Mora v. Martinez, 80 N.M. 88, 451 P.2d 992 (1969), in that the trial court filed a document entitled "Amended Court's Finding (sic) of Fact and Conclusions of Law" which deleted an alternate finding and alternate conclusion requested by plaintiff regarding the degree of disability. The alternatives had been included in the court's first adoption of the plaintiff's requests. Wholesale adoption of requested findings and conclusions is once again disapproved. Mora, supra.

Nevertheless, the only finding and conclusion relating to the issue of attorney's fees are Finding No. 20 and Conclusion No. 7:

20. Counsel for Plaintiff has moved for attorneys fees in this case, and the Court has heard said motion and considered the arguments of both counsel, and has determined that fees in the amount of 15% of the present value of the award made to Plaintiff are reasonable, and notes that this case involved the depositions of three witnesses taken in Oklahoma City, Oklahoma.

7. Compensation to which Plaintiff is entitled has been refused and these court proceedings having resulted in the collection of compensation having a present value of approximately $89,313.26, the attorney for Plaintiff is entitled to fees in the amount of 15% for the above award or $13,396.99.

Unfortunately, neither the Transcript of Proceedings nor the Supplemental Transcript contain any record of the motion, the evidence produced, or the arguments made concerning the propriety of the fees awarded. Instead, the finding and conclusion which we have quoted above indicate that the amount of the attorney's fees was reached solely by applying the same percentage figure to the total anticipated benefits as was found improper in Fryar #2, supra, and the additional observation that three depositions were taken out of state.

Plaintiff was obliged to request a record of the hearing on attorneys' fees, Fryar #1, if the award is to be sustained. The finding plaintiff relies on is insufficient, by itself, to satisfy Fryar #1's, admonition that there is "need for evidentiary support for fees awarded by a trial court," (93 N.M. at 488, 601 P.2d 718), and Fryar #2's, explicit directions regarding the factors to be considered and the type of evidence to be produced to prove adequate consideration of all of those factors. Both Fryar decisions clearly establish that it is an abuse of discretion to award attorneys' fees if the record lacks an evidentiary basis to sustain the award. We are bound by the most recent Supreme Court decision on that question. See Fryar #1. "Evidentiary support of the fee is essential." Clymo v. United Nuclear Corp., 94 N.M. 214, 608 P.2d 526 (Ct.App.1980).

Correlating the factors with the evidence, as was done in Fryar #2, supra, the instant record discloses the following 1. Offers of settlement : The record does not show that any offer was made, and the trial court made no finding on that matter.

2. Present value of the award : The court's conclusion of present value appears to be based on the total escalated and anticipated benefits for the entire period of plaintiff's statutory entitlement, without regard of the possibility of diminution or termination provided by § 52-1-56 A, N.M.S.A. 1978. The impropriety of escalated benefits had been discussed; we also believe it improper in considering that factor as it bears on the amount of fees, to establish the present value of the workman's award as including amounts over a figure due or to become due within six months beyond the date the award is granted, in the absence of evidence directed to the benefits continuing beyond the six-month period.

3. The chilling effect of miserly fees upon a workman's ability to obtain representation: As Fryar #2 noted, this is a policy matter rather than an evidentiary issue. We do not read Fryar #1 to indicate that in the case it cited, Herndon v. Albuquerque Pub. Schools, 92 N.M. 287, 587 P.2d 434 (1978), $3,800 awarded as attorney's fees for recovery in the trial court of a compensation award increased from $37,500 to $54,000 on appeal, was miserly; rather, it held that an additional $2,500 should have been granted for the work of claimant's attorney on the successful appeal. We infer from Herndon and Fryar #1 that an attorney's fee of $3,800 for successful prosecution of a workman's compensation case is not "miserly."

4. Time and effort expended by the attorney: The only evidence of the attorney's effort appearing in the record is a 1 1/2 page complaint, a request for hearing, notice to take two depositions, seven pages of requested findings and conclusions, and the transcript of a trial commencing at 10:00 a. m. in which one witness was called and two medical depositions (taken by associate Oklahoma counsel and totalling 31 pages of the transcript) were read. There is nothing in the record supporting the finding that three witnesses were deposed. There is little in Finding No. 20 to indicate that attorney's fees were awarded on any basis other than a flat 15% of an incorrect "present value" award.

5. Extent to which issues were contested : The trial court found that defendant had failed to pay compensation and reasonable medical expenses. That finding conflicts to some extent with the complaint, the evidence, and another finding that show defendant had paid all medical bills and compensation benefits of $3,650.21 up to June 23, 1978. Nevertheless, the pleadings and the testimony indicate that the only contested issue was the degree of permanent disability suffered by the claimant.

6. The novelty and complexity of the case: Item 5 above describes the issue. It was an issue even less complex that those stated in Fryar #2, supra, and certainly not novel in the workmen's compensation milieu.

7. The fees normally charged for similar services: There was no evidence and no finding concerning this factor. If Finding 20 intimates that a 15% fee award is the normal and customary charge in workmen's compensation cases, Fryar #2 disabuses that notion. It is an illegal custom and cannot be substituted for evidence on the normal fees charged in the locality for preparing similar pleadings, arranging for co-counsel on depositions, and three-to-four hours of trial time.

8. Ability, experience, skill and reputation of the attorney: Neither evidence nor findings address this component part of the fee-setting determination.

9. The relative success of the workman in the court proceeding: Unlike Fryar #2, supra, the trial court made no finding regarding the workman's success, but we note the award of 80% permanent disability and acknowledge that the record speaks on behalf of the workman's substantial success toward his claim of total disability. 10. The amount of the fee involved : This factor does not require a finding, Fryar #2, but there must be some correlation between the amount awarded and findings on the other factors. Since there is a dearth of findings on those other factors which should have been considered, there is no reasonable correlation, and the fee allowed stands with little justification.

11. The rate of inflation or rise in the cost of living: No evidence was presented nor finding made on this element. It can hardly be argued, however, that whatever the rise in the cost of living over the past several years, increases allowed in fees for trial should completely outstrip increases allowed for successful appeals. Compare $1,500 allowed in Fryar #1 in 1979 with $1,500 allowed in Livingston v. Loffland Bros. Co., 86...